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In Largest U.S. Wind Power Markets, Curtailment Declines even as Wind Power Picks
Up

May 12, 2014

In the largest U.S. markets for wind power, the amount of curtailment has declined
even as wind power has increased due to new transmission capacity and operational
changes, according to a study of U.S. curtailment practices regarding wind and solar
generation.

"Curtailment is a reduction in the output of a generator from what it could otherwise
produce given available resources. Historically, curtailment has usually occurred
due to a lack of adequate transmission, local congestion, and to a lesser extent the
need for system balancing," explained Lori Bird, lead author of Wind and Solar Energy Curtailment: Experience and Practices in the United States. "While the levels of wind curtailment experienced to date differ substantially by
region and utility service territory, curtailment has often been in the range of 1%
to 4% of wind generation, where it has occurred, and negligible in many regions. For
wind and solar projects, curtailment can negatively impact project economics. As penetrations
of wind and solar energy increase, curtailment practices and the use of strategies
to mitigate the potential for curtailment may become increasingly important."

The findings are drawn from a series of interviews conducted by NREL analysts with
utilities, system operators, wind energy developers, and other stakeholders. The report
provides case studies of curtailment experience and examines the reasons for curtailment
and procedures, compensation, and practices that can minimize curtailment.

Compensation and contract terms are changing as curtailment becomes of greater concern
to solar and wind plant owners. Negotiated contract provisions addressing compensation
of curtailed hours are in some cases leading to greater risk sharing between the generator
and off-taker.

Market solutions that base dispatch levels on economics create transparency and automation
in curtailment procedures, which apply equally to all generators.

Curtailed wind and solar resources may provide ancillary services to aid in system
operations.

Utilities are using several approaches to reduce curtailments, including transmission
expansion, interconnection upgrades, operational changes such as forecasting and increased
automation of signaling, and better management of reserves and generation. While these
mitigation measures can reduce curtailments, in the future, as penetrations increase,
curtailment volumes could rise as a fraction of total wind and solar generation.